Trendrating – Changing The Game For Active Managers

Trendrating provides the necessary advanced analytics and tools to gain a more intelligent synchronization to the actual price trends, filtering out the noise and the biases.

Seasoned fintech entrepreneur with more than 25 years’ experience in building world class companies in portfolio analytics and investment strategies modelling, Rocco Pellegrinelli, CEO, Trendrating is the design and creative force behind the company’s products and services. Over the years he has built and tested hundreds of models using fundamental, quantitative and technical analysis and AI methodologies—driven by innovation and problem solving. Rocco is focused on contributing to “positively disrupt” an industry that is forced to evolve by offering solutions that make a measurable impact.“I am committed to deliverreal benefits to customers, that should pretend more value from the providers industry,” says the pioneering leader.

Trendrating is the result of Rocco’s experience first as an equity portfolio manager for 13 years and then launching his first fin tech venture in the portfolio management sector, serving asset managers on a global scale (Brainpower, finally acquired by Bloomberg). Trendrating takes the ambitious challenge to deliver alpha to active managers—Alpha that is measurable, actionable and repeatable. “My opinion is that a large part of research, fundamental data and old school methodologies are unable to deliver real, measurable value to active managers,” he adds. “But capturing trends with well proven models is possible and profitable. Innovative, reliable, adaptive, robust systems are required.” Trendrating takes the challenge to deliver effective investment models and sophisticated technology designed to expand the arsenal of tools of portfolio managers. Superior performance come from discipline and a systematic reality check of assumptions. The mission of Trendrating is to provide innovative market intelligence to enrich the investment decision process and improve the performance on a consistent basis.

The Right Tools

According to Rocco, Stock markets display all the time what we call “performance dispersion” across sectors and securities. On a 9-to-12 months’ time horizon for any investment universe the average return of the top 25% performers vs the average performance of the bottom 25% can be as large as 40% and more. This offers a great opportunity to active managers to try and capture a fair share of the winners and at the same time avoid most of the losers. But how can an active manager “capture” part of this dispersion. It is necessary to have the right tools, specifically developed to measure and rate price trends. “We invented a way to rate price trends via a simple format (A,B,C,D), as trends are the most important factor to maximize returns,” explains Rocco. Trendrating provides the necessary advanced analytics and tools to gain a more intelligent synchronization to the actual price trends, filtering out the noise and the biases.

The company is serving professional investors that strive for constant improvement, aimed at delivering superior value, who understand the importance of not missing opportunities. “We serve discretionary portfolio managers as well as systematic investors,” adds Rocco. “Our 100+ institutional customers can use Trendrating across the whole decision chain, improving risk control, validation of ideas, tactical allocation, portfolio optimization, and even creating investment strategies that can easily be tracked and executed.”

Towards the Future…

Rocco explains that the recent stock market developments offer a great opportunity to active managers to win back credibility and assets at the expense of passive products. During the whole 10 years of the bull trend index linked products (primarily ETFs) outperformed most mutual funds and a massive shift of capital exited mutual funds to buy ETFs. Now the bear market is back providing a difficult environment to generate profits just passively following a list of stocks. Active managers, using all the available modern tools to selectively pick the winners and skip the losers, have a fair chance to fight back, recoup credibility as creators of value and gain back a good part of the assets that went to passive products over the last 5 years. But fundamental analysis and subjective valuations are not enough. They will have to realize that to deliver value it will take to incorporate intelligent, proven and fast “trend capture” methodologies, that can add an extra level of sound risk control and validation of investment ideas.

Trendratingis launching their “systematic management solution”, the platform combines the model to rate trends with a powerful engine that supports the design, test, real time tracking and execution of personalized investment strategies. The solution can fit any universe on a global scale, style and factor. It can be combined with a discretionary approach as well as can be used on a fully systematic basis. “With this solution we are making something very complicated and expensive really easy and fast to implement,” says Rocco.